tv Fast Money Halftime Report CNBC July 18, 2013 12:00pm-1:01pm EDT
1967. 3m going back to 1965. a lot of history being played out. >> don't overlook what's happening with oil because we are watching wti which has jumped to 16-month highs. that's the other side, carl, of the stronger u.s. demand story. >> q&a continues. let's get back to washington, d.c. >> let me change the topic real quick to housing. all right, thanks. welcome to "the halftime show." four hours until the close. green arrows across the board on this big day in the markets. here is what we're following on "the half." google glasses, what does one of the street's best analysts see for the company, the quarter, and the stock? cat or dog? jim chanos goes short so why is one of our traders going long? one big debate is just ahead.
first, a record day for stocks at the s&p and dow reaching their highest levels ever, and with bernanke back on the hill, are the markets finally getting his message and if so, what does that mean for your money? we'll bring you all the latest headlines from d.c., from mr. bernanke as they develop. steve liesman will join news a bit with his insight as well. we trade the action though with josh brown, stephanie link, mike murphy, and jon najarian. josh brown, markets getting the message? >> the market is getting the message. this is what we talked about for weeks on end. at first the taper sounds scary and then people realize the only way it happens is if things are improving. then the narrative shifts. it means things are getting better, means i'm more comfortable with the stock portfolio. you still have the vast majority of professionals and retail underinvested. the average strategist on the street has bumped up their allocations to equities but only in a minor way. still under 50%. kind of embarrassing at this
point. hedge funds are chasing. they're using the small caps with leverage. you can see it everywhere. >> russell is hitting a new high. >> that's how you catch the s&p. >> up nine of ten. you mentioned the stock portfolio. a stock portfolio right now filled with what? if the market, murph, is getting the message, what do you want to be buying right here? >> first of all, you want to be in the financials. we've talked about it for a long time now. we know at some point rates are going to go higher. whether that's next week, next month, who cares. >> for the right reasons, good. >> for the right reasons, great. i think better than good. for the wrong reasons, we have a major problem on our hands. if you look at the quarter that came out of these financials, so far i think you haven't had a misstep in the group. they've all had good quarters. they've all responded well to the quarters. so i'm really looking at value. i'm looking at things coming in with decent quarters selling off. across the board you can own the financials. another area we like is tech. i don't want to chase tech but i'm looking at things like ebay.
we're looking at that right now. >> steph, ebay, right? what do you think? outlook bad? >> no. they lowered guidance to the low end of the range. >> charitable trust. >> we own it. we sold a little bit on monday because the stock had run 13% into the print. >> buy on the dip? >> we are buying on the dip. i would say in terms of what you want to own, yes, i totally agree on financials. but look at the economic data points that we've gotten so far in july. it's still really early but look at philly fed, look at empire,n ahb, look at the permit number yesterday. that brings me back to, yes, financials, but also industrials. and then you listen to something like johnson control says today about europe, first time they're profitable in several quarters, several years. that is starting to see some recovery. csx also talking about better demand, very low inventories. union pacific, same drill. even back to ebay, they said
u.s. was really strong. i think you have to listen to what the companies have to say. we have some cash so we could buy these big dips and that's why we're comfortable buying some of the names. >> murph, you talk about tech. you're not buying intel are you? >> we're not but intel is a name we've owned in the past. >> you don't own it now. >> we don't own intel currently. i think the deal with intel if you listen to the quarter they had, we all know that pcs are in trouble. that's not news. you can look at the charts that are out there since the ipad was released, pc shipments have gone straight down. but intel isn't sitting there and not figuring this out. you know it, i know it. intel knows it also. >> that's a dead stock walking. >> they admitted that they didn't get it. they said they were slow to recognize mobility. >> right. >> hello! hello! tablets, mobile. >> and that's why they're getting punished and that's why the stock haven't taken part in this. it gave you a tradeable rally in the last six weeks or so but after the quarter they printed, there's nothing in the quarter that makes you say i need to run out and buy intel.
>> you can buy the derivative calls, the semi cap equipment companies. they lowered their cap x. they haven't stood by the cap x levels -- >> hold that thought. i'm sorry to interrupt. we want to go back to washington. elizabeth warren is questioning the fed chairman and we want to make sure we hear that. >> in other words, not from boring banking but from trading on wall street and elsewhere. so are you concerned that these biggest banks are loading up on big risks again or is there another explanation for this spike in profits? >> well, let me just say that we are quite aware of these portfolios, and we are addressing them in at least two ways, more than two really. but one of them is that we have just finalized new capital requirements -- >> i understand. >> -- that banks have to hold against these assets for sale, these securities, which should provide protection. we have done stress tests where
we assume that december 2008 type of financial shock hits and so there's a huge drop in asset values, and we have stress tested the banks again to see do they have enough capital to cover -- protect themselves against big losses in their securities books. the other thing is, of course, you know that we are working hard with our colleagues to put the volcker rule into place and that will restrict proprietary trading. >> let me say then, mr. chairman, the question i'm trying to ask about is whether this indicates they're load roing up on risk, and i very much appreciate what you're telling me about are the ways we're trying to regulate the risk when the banks take it on. maybe i could ask this slightly differently. and that is yesterday secretary treasury jack lew said, and i want to get the quote right, if we get to the end of this year and we cannot with an honest, straight face say that we have
ended too big to fail, we're going to have to look at other options. do you agree with the secretary of the treasury? >> i don't know about the timing. maybe i take another year from now, but i have said to you in an earlier hearing that, you know, there is a strategy. dodd/frank lays out a strategy. basel three provides additional support through capital, et cetera, but if those things do not make us comfortable about the status of the largest firms, i think addition yam steps would be appropriate. >> then we need to look at other steps. as you know, i have introduced along with senator mccain, senator cantwell, senator king, a glass/steagall bill, another tool in the toolbox to deal with too big to fail. i think at least now we have some time. the secretary of the treasury says by the end of the year, you say maybe a year longer but we have to keep this one under examination. fair enough? >> yes, i think we obviously
want to look at all tools. i think there's probably more scope for capital. >> yeah. >> if we're not comfortable with the stast of these firms. >> good. and fair enough on that. i want to ask you, as you know, the federal reserve and the o krsmth c announced last january that they were stopping their investigation into this systemic foreclosure fraud and that you'd reached a settlement with the largest mortgage servicers in the country. and just last week the occ announced that 52,048 people just in massachusetts received checks so far under this settlement, and it was an aggregate total of $41 million in compensation or about $800 a family. now, that's $800 a family in a state, massachusetts, where the median home income is -- i'll do the math for you.
that's about 0.2% of the purchase price of the average home in the commonwealth of massachusetts. now, it's my job to look out for families in massachusetts, including helping them get basic information about whether settlements made on their behalf by the government are fair, and to do that six months ago i started asking for basic documents about the investigation and to see what the foreclosure fraud investigation had uncovered. how many people had lost their chance to save their home, just really how bad the damage was. so far the fed and the occ have disclosed very little of what i have asked for. so the question i have is how the people i represent in massachusetts who believe they were cheated or the 4 million people who received checks around the country, how they
know that the payments they're receiving are fair if the fed and the occ won't disclose details about what they uncovered in the investigation. >> well, as you know, we stopped the investigation well before all 4.2 million borrowers were analyzed, so we don't have that information for everybody, but we do have it for some folks, and we are looking to see if we can find a way to get that information to the individuals who do -- who did -- whose files were evaluated by the independent consultants. >> good. so we're talking about getting that information to them and releasing more information about what you did find in the aggregate? >> we hope to have a report on this whole thing within the next couple months. >> good. >> that will lay out basically all the information we have. some of the things that you have requested, frankly, we just didn't collect or whatever, but
wem try to provide as much transparency as we can. >> i would be very grateful for that, mr. chairman. you know my concerns in this area generally, that if the regulators are not aggressive enough, if they don't require admission of guilt, if they never take large financial institutions to trial, then the resulting settlements are too weak, and so i know you appreciate that a slap on the wrist is not enough, and if the occ and the fed are confident that these are good settlements i think it helps everyone if the information is out there. so thank you, mr. chairman. >> i'd like to add that the people who received checks have not yielded their legal rights and they could pursue this further. >> and i hope by revealing this information they will be better able to evaluate whether or not that's appropriate for them. thank you. >> senator crapo has a brief statement to make. >> yes, thank you, mr. chairman. i have a number of additional
questions that -- >> we're going to take it back here. i think it's only appropriate after that exchange to go right over to steve liesman and, steve, she quoted from your interview yesterday with the treasury secretary from delivering alpha. >> that's right. and it was a significant comment yesterday. let me recap what the treasury secretary said. he said if we get to the end 69 year and we still don't feel like we have ended too big to fail by implementing all 9 things in dodd/frank we're going to do, then we should re-examine what's out there. it's essentially a solve to people like warren and others in the senate and cog who want to do more to break up the big banks or slap them with more capital charges. bernanke essentially agreed with lieu but a question as to the timing. lew says by the end of the year. it sounds more like a preliminary deadline. bernanke willing to give it a little more time. but near regulator effectively ruling out doing more, going beyond dodd/frank when it comes to putting more restrictions or rismts on the banks if there's
still a sense out there we have not ended too big to fail through dodd/frank. >> we're going to take a quick break. the notion of what the markets are doing today, that the markets themselves are becoming more at ease understanding the message that the messenger, the fed chairman, is trying to deliver. >> we've been talking about this for a wile. we're talking about qe into the middle of the next year. not as much as we have had but a tapering perhaps in september, maybe not if the data doesn't support it, but stimulative policy will go on. if the market is getting that message, i'm not sure what stands in the way of the rise as long as the earnings are there, scott. >> we're looking at the record-setting day on the street. we'll take a quick break. take a look at what the dow is doing. 15,572. all-time highs for not only the dow but the s&p 500. a strong day for the industrials. financial numbers continue to come in. the quarter numbers are beats almost across the board at this point. morgan stanley the latest there. we'll talk more about that coming up.
up next, google reporting after the bell. will the numbers be enough to push that stock to the 1,000 club? we have a top lan ais analyst t it down. find out why carl icahn didn't sell his stake in netflix. ars. i use daily market commentary to improve my strategy. and my local scottrade office guides my learning every step of the way. because they know i don't trade like everybody. i trade like me. i'm with scottrade. (announcer) scottrade... ranked "highest in customer loyalty for brokerage and investment companies."
52-week high on an earnings beat. if you tuned in on monday around listened to an lirs mike mayo, you would have known they were coming. >> they will be on the cover of every business magazine in a year or two. we're getting ahead of that curve because you're going to see explosive growth out of wealth management at morgan stanley. it will be half the company. >> the fact of the matter is we could have played a mayo sound bite from an interview the last time he was on the half several months ago where he was ahead of being -- >> morgan stanley has been his favorite pick every time he's been on recently. >> strong quarter, wealth management margins of 18.5%. the stock is obviously reacting. >> i'm in the wealth management business. business is very good for our segment of wall street. the fact of the matter is morgan stanley saw that rise 10%. this is a huge business of theirs now that they've consolidated the rest of smith barney and it's just a great time right now. people are coming back to the markets. people are coming back to
stocks. morgan stanley also crushed it in institutional trading. it's really broad based where they're finding success. it echoes what we heard from the bang of america unit merrill lynch and i think it continues for more than just one or two quarters. >> can you really buy everything in this basket? can you buy morgan stanley here? can you buy goldman here? >> it's a small basket. there used to be ten of these. there's only a few. >> buy all of them. >> if you want real capital market exposure it would be goldman and morgan stanley. if you want a diversified basket, you buy jpmorgan. it appears investors are looking through their net interest margin weakness because it was liquidity driven and if you want to play the yield curve more as a pure play, you do the regionals. >> i was going to ask you about the regionals. >> i'm surprised that key is up so much. they had a good quarter. just imagine when -- if the economy improves and the yield curve steepens how profitable this company and the regionals
will be. i think you can own a basket of all of these. >> doc, i haven't forgotten about you. i'm kind of lying there but -- >> i thought maybe you had, judge. >> we had a little thing called the fed chairman's testimony. >> i understand and elizabeth warren as well. >> what the do you do with the financials? >> i loved goldman sachs on monday when mayo was talking about them and bank of america. bank of america absolutely did blow it out. that's an 8% move just in the last three days, judge. so phenomenal move there. kudos to mayo, and i like the way goldman performed as well. doubling up on profits. i think lloyd deserves a pat on the back for that the same way the they are patting the fed chairman on the back. >> are you happy buying these names after how far they've run? >> citigroup i think is one that hasn't had the huge runup that a lot of others have. i think there's a lot of -- with
the new ceo, there's a lot of potential for several near-term catalysts to get citi moving. that's one we're looking at right now. >> let's send it over to she ma mody for a quick market flash on dell. >> dell announcing today's special meeting of shareholders was adjourned to provide additional time to solicit proxies from dell shareholders. the vote has been pushed out to july 24th. in response southeastern asset management and carl icahn said, quote, we believe this delay reflects the unhappiness of dell stockholders with michael dell/silver lake offer which we believes substantially undervalues the company. they said this is not the time for delay but the time to move -- the time for dell to move forward. dell shares up about 2%. scott? >> thanks. josh, see what happens now. >> we'll see what happens now. >> maybe he bumps. do you think he bumps? >> i guess i don't know what he will do. if i were him, why not? who wants to deal with this anymore? >> proxy fight, who knows. >> why would he want -- who wants to tussle with carl icahn
for longer than they have? bump the price, get the deal done, or stop it already. >> icahn also, this, of course, coming from delivering alpha yesterday, he weighed in on netflix and why he hasn't sold a single share yet. let's take a listen to that. >> the credit goes to the two guys that run that fund, that run that account, and they're both great -- they both have a huge success the last three years. one is my son and when i wanted to sell it about 100 points ago, i really wanted to sell it, my son threatened to leave. >> all right. let's talk netflix. who is a buy irof netflix here? >> i wouldn't be a buyer of netflix here. i missed the whole runup. sometimes it's better to be lucky than good. if you're in the stock from the double digits and it's trading up at 269, you have to take some off the table here. to run in and buy it here, great company, great service, i don't think you buy netflix. >> this is a mo mo name.
it's an easy trade. 240 is where it broke out from. it's been support before on a short-term basis. if you're long the name and you want to do risk management, that's where the stop goes. very simple. >> i still have questions about the content and the expenses of the content. >> the cost of the content? >> sure. >> when i heard he was still in herbalife, if you have to compare the two or decide between the two, herbalife actually, those fundamentals are really pretty good. double digit sales, double digit earnings, margins are improving. that would be the one i'm a little more excited about versus a netflix. >> there's the stock up 5% today. maybe the big headline from icahn yesterday is that he said he's changing his tune on of all people big ackman. >> anybody that makes me a quarter of a billion i like. so i have nothing bad -- hey, the guy -- be honest with you, he never would have been looking at herbalife it ackman hadn't
come out with that report. >> trade of a life here? >> i want to say you were amazing with carl yesterday. that was one of the best live interviews and i go to hundreds of conferences. i want to bring that out. carl was incredible yesterday. >> carl was incredible. >> on herbalife this looks like if you're short this name and we know who is, this looks like a burning house with the doors barred. i don't know how this is going to resolve itself. >> 5% is a pretty good move for a day for this stock. >> also i think his thesis on it, just saying when off huge short position and you come out and make your case in front of a lot of people who are managing a lot of money, you can get boxed in there. if this is the case, if he is forced to cover here, he being bill ackmaackman, there's a bigp coming. >> it's still trading at ten times earnings. you can make a fundamental case to be owning this one. >> let's move on, talk about google, reporting second quarter earnings today after the bell. the internet giant already hit a record high this week, so will earnings be the catalyst to push the company even further?
across the 1 is$1,000 mark. anthony, welcome back. good to see you. >> thanks for having me. >> what are your expectations here? the stock has had an obviously great run. >> yeah. i mean, i just think that when you look across the market, you look at technology, there's a real dearth of large cap names in technology that are consistently growing revenue at 20%. you can count them on your fingers. i think there's scarcity value in google and, yeah, the stock has been great. we've loved it. we're overweight it now. we do think it's going to $1,000. you asked about earnings and what could get it there. if you look at next year's street earnings consensus and you take 20 times earnings, i don't think that's unreasonable at all for a company growing revenue consistently 20%. you get to $1,000 in 66. >> i wanted to ask you, most of this company's revenue continues to be advertising, but they
really do have some off the wall exciting things they're doing and they look like they're getting closer and closer to being commercialized. are your estimates baking in anything in the next two or three years from things like glass and the cars and all of the rest? >> we really have not, and the way we've approached it from a research perspective is to do small reports on what the upside could be from something like a google maps or the connect it car or youtube, but really like our model is conservatively just looking for improvements in terms of the core search business that google continues to dominate. their dominance on mobile with android, with youtube, and we just think the street will be looking for firming and improvement in pricing on keywords in smartphones and tablets. omni com that reported this morning will tell you that there's been stability and improvement in these ad markets. so google is right there in terms of the crosshairs of advertising technology. like you said, some of the innovative product that is one
of them might hit and may prove incremental to people's earnings models. >> it's not -- the stock has had its run as we've said, but it's not like this company in the last, say, four quarters is knocking it out of the park every quarter. it's surprised negatively. it's surprised positively. there are questions as to whether cost per clicks are going up or down. what do you make of all that? >> well, i think that, you know, maybe when you look at the history over the last four to six quarters, you may be seeing the impact of the motorola acquisition which had an impact on earnings going back almost a year ago. but i think what investors are really compelled by is the steadiness of the revenue line. and if you look at pricing, what people are interested in is that cost per click. we actually ran a check with search engine markers and the value a few weeks ago that suggests there could be some volatility to the upside given like i said firming and pricing on mobile devices and on tablets
for cost per click. i think if you look back, the revenue growth for such a big company has been incredibly steady when you look at how big this company is. trees don't grow to the sky but this company is coming close in terms of the steadiness of the top line. >> certainly is getting close. anthony, good to talk to you. >> thanks a lot. >> quick trade on goog. >> a lot of people have $1,000 price target on google. it's trading at $915 giving you a 9% upside. i wouldn't chase -- >> it's 17 times forward earnings. this could be the most important company on the entire internet. it could be a dow component in five years. >> you're saying no, you say yes. >> i would be in this name. >> i wouldn't buy it. for the upside, let's see whoo it does when it gets to it. if it gets to $1,000, let's watch that 7% or 8% move. >> just like stocks rarely stop at 100, they probably don't stop at 1,000. we don't have that many stocks that have crossed this threshold so we don't know. >> cost per click is very, very important and expectations are
for a decline of 6.5%. that would be better than a decline of 16% last quarter and a 10% decline fof the first quarter. >> doc? >> you could see a surprise here, judge. it's only pricing in a 4.5% move, that's $42. google could easily do that and i'd be with josh. i would be betting on the upside but i would play it with options, not with stocks. >> big data download now. we'll be looking at google as well today. is the company on the right growth track? things are looking good if you're zeroing in on tangible book value which was grown in the past four quarters. find out 250d, big data.cnbc.com. next up right here on "the half," oil is at a 16-month high. we're heading to the pits for that trade after the break.
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welcome back to the halftime report. the oil spike continues as crude hits a 16-month high. let's get more from josh lipton at the futures now desk. >> that's right, scott. it's been an incredible run for black gold, and today oil hit 108 bucks a barrel. that's the first time since march of last year, so, jim at the cme, what's behind the rally? is it economics trade, supply pressures or something else, jim? >> there's about four different things that are behind the rally in providing tail winds. you have to break them down into what's the most important. today we had a dovish fed yesterday coupled with decent economic data. it's convincing the markets things are okay. i don't believe there's much of a middle east risk premium like we argued about a couple weeks ago. i think it's more of a risk on trading oil. look at those spreads between wti and brent. they have narrows very much which means there's something involved domestically. either way it seems the path is
cleared to $110. >> you heard jim. when will oil start to run into resistance here? >> josh, i'm looking at the $110. above $110 we're looking at $115. if you pull up that monthly chart, clear defined levels on the upside. let's back it up to july. we gave you the buy and breakout on "fast money" and the show "futures now." to buy above that $98 level. consistent weekly draws in inventories and hedge funds according to cftc are adding to their net longs. you have draws, people buying it, and buying that breakout and technical traders love this market. i think with jim we go to $110. >> listen, you can catch more of jim and rich on our online show where we'll also hear from portfolio manager louis navellier. find out at 1:00 p.m. on futuresnow.cnbc.com. >> thanks so much, josh lipton. josh brown, you're long energy
names. >> there is a renaissance of exploration of production here in the united states, north america. you can be in apache, occidental. i think they're all going to work. they've underperformed for a while. it's time. >> i agree. we actually just started a position in anadarko as well. we like occi for the special situation. i have liked the drillers for a while. i think halliburton is poised to have a good quarter. and i think you can continue to look at the e & c times. i have been on cbi, on floor. i think you can look at kbr. >> schlumberger, anybody? >> i'll take halliburton over schlumberger. >> you can almost do everything except the refiners. i think it will be that broad based when these names start to catch fire. >> up next, want to know how the best are investing? a stock star picker reveals three areas of the market he's zeroing in on and what names he's buying. plus, with he know how jim chanos feels about caterpillar.
>> we are short caterpillar inc. iconic american company, leader in its class, but tied to the wrong products at the wrong time in the cycle. >> after the break, mike murphy is going to tell you why jim chanos is wrong, and he's going to try to convince josh brown of that as well. one heated dog fight over cat just ahead. [ cows moo ] [ sizzling ] more rain... [ thunder rumbles ] ♪ [ male announcer ] when the world moves... futures move first. learn futures from experienced pros with dedicated chats and daily live webinars. and trade with papermoney to test-drive the market. ♪ all on thinkorswim. from td ameritrade. a-a-a.
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welcome back. legendary short seller jim chanos a betting big against caterpillar. he described the heavy equipment maker as tied to the wrong products at the wrong time in the cycle. is he right? murphy is the bull, josh is the bear. 1:30 on the clock. >> when you look at caterpillar, first thing is i look to buy out of favor best in breed companies and caterpillar is exactly that right now. i think what chanos said last night and i listened to it from the delivering alpha conference, i think he's a little late to the game on that. caterpillar is trading in the $86 range. it has massive support around $80. we know the commodity super cycle is slowing down. whether or not it's ending. but that's been going on for years. i think the time to get long
caterpillar is right here. we bought the name today. the reason is i think that all the negative news on china is priced in there. i think the stock is going to rebound. they've been buying back stock, increasing the dividend. now is the time to get long. >> michael -- >> joshua. >> where do i begin? first of all, valuation is not a catalyst. we have no idea what future earnings are going to be. all we know is this company routinely misses their estimates and then misses guidance and guides lower. they will continue to do it to you because they're a company not in control of their own desti destiny. all i need is for china to continue what they've been doing and have publicly stated they are deliberately slowing down infrastructure spending. unfortunately for caterpillar, they have no choice but to bear the consequences of that and, by the way, when china slows down, latin america slows down, europe slows down. it hits the whole world. it's a great company. i see the support at $80. i got to tell you, you better
pray that holds if you're long this name because if it breaks down, things get really sloppy really quickly. >> it definitely could but the point is on the china news and the emerging markets news, all that stuff has been out there. we've known china has been -- >> it's getting worse. i got to tell you -- >> i appreciate you hitting on me here but hold on one second. you look at caterpillar here. yesterday the stock was trading at $89. jim chanos came out and made a statement he was short the stock. >> what are you going to do if they miss earnings this quarter. will you buy more? >> where is the trading when they miss? >> i have no idea. >> if it's $92 i won't buy more. they miss earnings and the stock jumps higher, i won't buy more. >> who made the more compelling argument? >> well, i get both sides. i lean towards the bullish case. i don't think i'd be buying at $85, $86, more in the low ats to mike's point because i think a lot of good news in recently -- it's jumped and i think a lot of good news is tarting to come
out. uri posted a good number and that's construction market and a business piece of the cat story. so while mining equipment is concerning. i think there's a lot of offsets. low 80s is where you want to buy it. >> dr. j, what do you think? >> yeah, well, as you know, scott, i bought this one basically right about 80.5 and got out of it at $87, so i'm not in the name now. i would reload if it dropped. i think africa and construction projects to steph's point are reasons to own this stock here. i'm not so concerned about china. so if chanos' effect yesterday was a $3 drop or so, if there was any carry-on to that one today, i would jump in and buy. >> tell us who you think won that debate. tweet us @cnbcfastmoney. where should you be looking for names that will outperform. jeff roddinghouse is zoning is
on three key areas. he joins us from baltimore. jeff, good to see you. >> thank you very much for having me on. >> you bet. what are the areas we should be looking at right here and right now? >> one theme we really like is the commercial arrow space theme. stocks like boeing who provide and manufacturers the aircraft. we like united technologies, precision cast parts or honeywell. we think it's a long multiyear cycle and we think all four stocks will go quite well. >> you're not concerned this dreamliner story and some of the fallout for some of the suppliers, honeywell, et cetera, it doesn't bug you at all? >> no, it doesn't. the technology going into these new airplanes, the 787 in particular, is extremely complex. it actually plays to our advantage given the fact that this is a duopoly structure. so you do expect with a new
aircraft some bumps in the road, but we think longer term you look through the noise and you see great cash flows being generated by boeing and its suppliers over the next few years. >> you like wireless infrastructure as well which is interesting. cisco has had a great run. some of its peers have not. juniper is the obvious lag to a cisco win. >> yes. well, not necessarily. we think there's going to be an inflection point or an acceleration in wireless infrastructure spending in the second half of this year. cisco is a great way to play it. it looks better in the domestic market but also particularly in the chinese market where we think there's going to be a build of 4g wireless infrastructure. plays in juniper cisco and even on the semi-conductor side a company like altera. >> bank earnings have given you
an opportunity to almost have your pick of the litter. you're picking citi. why? >> first the housing. we think house something getting better and as they're able to roll off some of the balance sheet issues on citi holdings, we think that's a great driver for citicorp as well as new management. new management came into citi a year ago and we've met with them a number of times. we think they have a really good strategy. with the stock trading under book value it doesn't make a lot of sense for us. >> you don't have doct-- you're a holder of dell in that large cap fund? >> we're not a holder of dell. >> good to talk to you. thanks for coming on. >> thank you. >> jeff roddinghouse. we're trading more market moving names from delivering alpha after the break. nelson pel says pepsi could hit 175 bucks by 2015. can it? or traders let you know what they think when we come back. 5-0
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grassroots startup. how one entrepreneur is cashing in on weed. now back to scott and "the halftime" group. >> thanks. pepsi and mondelez is moving higher. the chairman said yesterday that pepsi should buy the smaller snack food company. there's also speculation about a pelts stake in dupont. dupont was a big mover on the news. if you listen to pepsi, you don't get any indication they're willing to listen to this idea from mr. peltz. >> i'll just tell you, i think pepsi works either way whether they listen to him or not. it's a fabulous business. i like the stock here. but i wouldn't want to bet against peltz. to the dupont thing, we don't know what his intentions are. we can guess given the fact that agricultural has become important at dupont. i'm long the stock and steph is long the stock as well. we were very pleasantly surprised yesterday, but there
are so many different ways to win in dd. i wouldn't be surprised if that thing trends higher for the rest of the year. >> i think it's interesting because the stock didn't have a big reaction after he said that. that's something do your own homework, don't jump in just because nelson peltz is long the name. >> they both popped. the minute that andrew and nelson were talking about pepsi and mondulez they both popped. >> and then pulled back. unlike dupont which is up three points when he spoke about it. i think dupont you wouldn't want to chase because of that pop it had. we all know nelson peltz will sit there and it may not be tomorrow, next week or next month, but we will keep pushing and a lot of times something does happen when he's looking -- >> if you had to pick between pepsi and coke, which one would it be? >> i lean towards coke. they've historically out executed pepsi and pepsi is up quite a bit this year. it's up -- it's beaten coke by
10%, and it's basically the same valuation range. i think coke has lagged. i think there's things they can do. i like the emerging market exposure. 80% of their profits are tied to overseas. as the markets recover i think there's more upside. back on the other names, margi depressed. i think there's things that can happen there. whether this takeout or something happens or not, dupont we own and like, and i just hold it here. >> your thought on pepsi? pepsi or coke? >> pepsi, absolutely. the snack foods, fritos, doritos, tostitos. i'm just telling you what's sitting in front of me on the desk here. i would buy them all. everybody wants that. >> number 1, sherwin williams is down. a big drop. >> they didn't deliver really after running on the court the
entire year. i think you have to watch this. is this a one time thing or is this a sign of more to come in these housing-related names? i would watch it closely. >> steph, johnson controls? >> they've been selling out an electronics piece to gntx, and i think profitability is also a big positive, and i like the auto parts sectors. >> josh brown, intel, we touched on it earlier, but how bad can it get it get? >> there's nothing not to like here. they've got some creative initiatives and things that might work out, but they can't get big enough, soft enough to match up that core market. >> xilinx? >> stock has absolutely zoomed. you've got lazard and jp morgan
moving up today. i think this one continues to trade higher, although i'm taking a little off the table. >> let's look at the nasdaq 100 lower on the day. led there by e bbay and some otr things. coming up, not so fast, stephanie link. it's your turn on the hot seat to manage a trade gone bad in valet. you tweet it, we'll trade it. we're honoring your request on winning plays when we come back.
welcome back. not so fast, stephanie link. our traders are quick but not always right. in april stephanie made a bullish call on valet. let's take a listen. >> they're doing better in base materials, the base business. and that i think is where you're going to see an unlock of value going forward. expectations are extremely low and you get a 5% dividend yield. >> maybe they're growing lower, steph, because the stock is down 14%. >> let's see when they say on their production report next
week. we had very good points on rio this week. we have held it throughout the downturn, but we're now buying it. >> you're buying. so your conviction has not waivered one bit? >> no, it hasn't. i think because of china, because of brazil, and why i own it is because of internal self-help. they are selling assets, focusing on profitability and you get the 5% dividend yield, which is a little higher now that it's down while you wait. >> final trades up next. we've completely integrated every step of the process, making it easier to try filters and strategies... to get a list of equity options... evaluate them with our p&l calculator... and execute faster with our more intuitive trade ticket. i'm greg stevens, and i helped create fidelity's options platform. it's one more innovative reason serious investors are choosing fidelity. now get 200 free trades when you open an account.
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buy. >> murph? >> dupont, it's going higher. >> tool works. buying that one with both hands. >> that does it for us on this record-setting day on the street. there's more at 5:00. have a great rest of the day. see you tomorrow. as usual, scott just nailed it right there. my goodness, welcome, everybody. the bulls are out in force on this very hot day in new york city. the dow, a record high today, now a little bit off it. the s&p, a record high and now a little bit off it. there are the industrials. there they are for the year, both up 18% year to date. now let's take a look at west texas crude now at a 16-month high. look at that one,